BP, contractors start trial for worst U.S. offshore spill

NEW ORLEANS | By Kristen Hays

A BP logo is seen in front of an apartment block near a petrol station in Moscow October 22, 2012.

Reuters/Maxim Shemetov

NEW ORLEANS A long-awaited trial over the biggest U.S. offshore oil spill began on Monday, with governments, businesses and individuals blaming BP Plc mostly for the 2010 disaster that killed 11 rig workers and spilled 4 million barrels of oil into the Gulf of Mexico.

"Not only was it within BP's power to prevent the tragedy, it was its responsibility," Mike Underhill, a U.S. Justice Department trial attorney, said at the trial over legal culpability for the blowout and spill.

The trial is being held with no jury before Judge Carl Barbier at federal court in New Orleans.

Lawyers for other plaintiffs also slammed BP executives, as did attorneys for two of the well owner's co-defendants, rig owner Transocean Ltd and cement services provider Halliburton Co. BP lawyer Mike Brock said the blame was shared by all three companies.

BP must show that its mistakes do not meet the legal definition of gross negligence required for the highest amount of damages. BP has already spent or committed $37 billion on cleanup, restoration, payouts, settlements and fines.

Beyond that, liabilities could stretch into the tens of billions of dollars if Barbier determines BP or the other defendants were grossly negligent. Oil came ashore from Texas to Florida, threatening livelihoods and state economies dependent on seafood and tourism, so the list of plaintiffs is long.

Most observers expect the case to be settled before the trial results in a verdict.

Underhill said that less than an hour before BP's long-troublesome Macondo well ruptured and caused an explosion, BP's top well site leader on the rig called an engineer in Houston to discuss a critical pressure test that indicated problems.

Company officials did not stop the operation and "11 souls had 47 minutes to live the rest of their lives," Underhill said.

Underhill said the accident could have been avoided if onshore engineer Mark Hafle and well site leader Don Vidrine on the rig had done their jobs. Vidrine faces separate criminal charges in the disaster, as does Robert Kaluza, the other highest-ranking supervisor aboard the rig before the disaster.

Jim Roy, an attorney for other plaintiffs suing BP, Transocean, Halliburton and others, said BP executives at the highest level felt pressure to push output to the limit.

"Production over protection. Profits over safety," said Roy, who represents plaintiffs who did not take part in an $8.5 billion settlement BP struck last year.

Roy also said Transocean opened the door to disaster with poor staff training and poor maintenance of seabed equipment, while Halliburton made substandard cement to plug the well.

Transocean's lawyer, Brad Brian, came out swinging against BP, saying rig workers trusted the company and died betrayed.

Brian noted BP employees had referred to Macondo as a "well from Hell" in emails, and the inaction following Vidrine and Hafle's 8-minute phone call showed they did what BP had done for two months in the face of a risky well: "They did nothing."

Halliburton's lawyer, Don Godwin, made similar arguments about BP but also said Transocean's rig crew should have shut in the well at the first sign of trouble. "Now is when they want to pass the buck and blame my client for their misdeeds," he said.

And David Beck, the lawyer for Cameron International, maker of the blowout preventer atop the well, said the structure works in tandem with other efforts to prevent disaster.

"It's a blowout preventer. It is not a blowout stopper," Beck said.

In BP's opening statement, Brock said the misinterpretation of the pressure test was made along with Transocean. "It was a mistake made by several men with two companies," Brock said. "They should not have accepted it, but it was a mistake."

ASSESSING BLAME

Louisiana continues to suffer from the oil spill, state Attorney General Buddy Caldwell said on Monday, with hundreds of miles of coastline still being polluted "less than 30 miles from the door of this courthouse."

Barbier, overseeing the trial, has deep Gulf Coast roots. Born in New Orleans in 1944, he went to Southeastern Louisiana University and Loyola University New Orleans School of Law. He had a private practice for years in New Orleans before President Bill Clinton tapped him for the federal bench in 1998.

The judge, who handled several high-profile cases stemming from Hurricane Katrina, had postponed the BP trial by more than a month. An army of media have descended on New Orleans to cover it, and the delay avoided a clash with the NFL Super Bowl on February 3 or the Mardi Gras festival on February 12.

The fact that the case has not yet settled surprises many. "I never thought that they intended to try this case and really cannot afford to do so because the exposure is too potentially catastrophic," said Blaine LeCesne, a professor at Loyola University College of Law in New Orleans.

The trial's first phase focuses on how much each company is to blame and the degree of negligence. Luther Strange, Alabama's attorney general, said he would seek to show BP, Transocean and Halliburton all acted with "gross negligence and willful misconduct" and therefore would owe his state punitive damages.

Any punitive damages would come on top of billions in potential fines under the Clean Water Act. The payout by BP so far included a record $4.5 billion in penalties, and a guilty plea to 14 criminal counts to resolve charges from the Justice Department and civil claims from U.S. securities regulators.

BP has sold assets to help cover its spill-related costs, including its older, smaller Gulf of Mexico operations.

The second phase of the trial, expected to start in September, will focus on the flow rate of the oil that spewed from the well. The third phase in 2014 will consider damages.

The case is In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010, No. 10-md-02179, in the U.S. District Court, Eastern District of Louisiana.